The Nature of Israel's Public Policy Aimed at Curbing the Rise in Property Prices from 2008-2015, as a Derivative of the Country's Governance Structure

THE RISE IN PROPERTY PRICES FROM 2008-2015, AS A DERIVATIVE OF THE COUNTRY'S GOVERNANCE STRUCTURE

Abstract. The paper portrays public policy steps taken in order to reduce housing prices, formulated and implemented in Israel 2008-2015, and analyzes them in light of the locally prevalent economic worldview and governance structure. Analysis of the policy shows that in order to understand the justifications for its formulation it should be viewed through the positivist worldview that focuses on the subjective considerations of policy shapers that neutralize its objective-normative efficacy. The paper stresses the impact of the country's governance structure at each point in time on the type of policy chosen and determines that a democratic but weak and unstable governance structure leads to the formulation and implementation of a positivist policy reflecting politicians' narrow interests of reelection. In contrast, stable democratic rule supported by a sound majority of a single ruling party can easily sustain public policy that expresses the normative approach, reflecting social values as defined by politicians.